The nation of India, with its over 1.3 billion population, is about to flip the market for electric vehicles (EVs) on its head—Taking almost an opposite approach to marketing than that taken by current EV leaders, such as Tesla Motors.
As India joins China in the pursuit of sustainable vehicles for populations north of a billion people, pressure on the lithium suppliers of the world just increased significantly—Making way for new countries to step up and provide additional supplies.
China is going to pose as a major competitor to Indian automakers in the wrestling match for the world’s lithium. Already China has staked ground in major lithium battlegrounds like South America and Australia, where firms such as FMC Lithium (NYSE: FMC), and Galaxy Resources Limited (OTC: GALXF) operate.
If the world’s EV market is going to take on another heavy hitter in the form of India’s billion-plus population, with an ever-increasing amount of drivers on the roads—other countries will have to step up and produce lithium to meet the swelling global demand.
One country that’s always been mining-friendly, and prolific as a resource economy, is Canada, where companies like Nemaska Lithium Inc. (OTC: NMKEF) (TSX: NMX) and QMC Quantum Minerals Corp. (TSX.V: QMC) (OTC: QMCQF) are getting closer to putting Canada on the lithium map.
Irregardless, the rise of EVs in places like India and China is certainly going to put further pressure on the global lithium supply—Inevitably boosting the fortunes of all lithium companies, including FMC Lithium (NYSE: FMC), Galaxy Resources Limited (OTC: GALXF), Nemaska Lithium Inc. (OTC: NMKEF) (TSX: NMX) and QMC Quantum Minerals Corp. (TSX.V: QMC) (OTC: QMCQF).
INDIA AIMING FOR THE MASSES FIRST
Until more recently, EV marketing was targeted at the wealthy, wooing them in with sports car designs, and lots of bells and whistles—Despite major efforts to bring down the starting costs, Tesla still has the image of a rich man’s car.
However, recent announcements from India look to be the topsy-turvy version of that type of marketing, with an emphasis being placed on keeping costs down, and aiming at the masses instead of just the elites.
India’s EV sellers are starting low, and aiming up-market—not the other way around.
And major automakers are setting up shop to build their vehicles in India for the Indian people.
Part of this strategy comes from an overall lack of vehicle ownership in general in the country—Only 20 vehicle owners per 1000, compared to 800 per 1000 in North America.
For now, the aim is to introduce an additional 10,000 EVs to India’s roads, both in the form of cars and of mass-transit buses.
"We started with mass mobility and will then go to an aspirational model — just the opposite of Tesla," Mahesh Babu, Chief Executive Officer of Mahindra Electric Mobility Ltd., said last month at a conference in New Delhi. "It's important to think about public mobility when thinking of electric transport."
But as the aim is to make vehicles more affordable, even a small uptick in vehicle ownership in India will put enormous pressure on the lithium sector, that’s already being dominated by large-scale Chinese buyers securing space in South America.
If Indian manufacturers are to compete for the limited lithium supplies on the market, there will have to be openings elsewhere, and that opening could possibly come from Canada.
CANADIAN LITHIUM A POSSIBLE MATCH FOR INDIAN BUYERS
Trade between India and Canada has been healthy for quite some time. Canada has Trade and Investment Representatives stationed in Vancouver, Mumbai, Delhi, and Chandigarh, to help better foster export opportunities between countries—And free trade agreement negotiations have taken place in the last decade.
For Vancouver-based QMC Quantum Minerals Corp. (TSX.V: QMC) (OTC: QMCQF), the prospect of another country in the form of India presenting additional potential for offtakes only bolsters the company’s outlook.
With a high-grade lithium project located in Manitoba, known as one of the world’s most stable, and mining-friendly districts, QMC has positioned itself with significant potential for a strategic alliance with a future Indian lithium buyer looking to buy where China hasn’t already set its flag.
The company’s flagship operation, known as the Irgon Lithium Mine Property, sits on a property that once hosted the Irgon Mine.
Acquired back in 2016, QMC has steadily developed the property towards its true production potential.
The site had significant historical work done in the 1950s, which discovered a massive resource estimate of 1.2 million tonnes, with grades of 1.51% Li20 over a 365-meter strike length to a depth of 213 meters (currently 43-101 non-compliant). The mine actually was set to go into production–Only it was during a different time, when lithium prices weren’t close to what they are now.
QMC has been quite active on the property over the last month, having sent over 144 samples to SGS Labs in Lakefield, Ontario for geochemical analysis, only to follow up by nearly quadrupling the property size based on what they’ve gathered so far.
Through channel sampling—and soon-to-be drilling—their way towards bringing the 1.2 million tonnes of historical resource to today’s compliance standards, QMC is solidifying its place for a potential international partner to step in and take the project with them over the finish line.
Who’s to say that partner couldn’t come from India?
The company’s technical team is confident that with more development work, not only will they prove up the Irgon Mine’s historical lithium resource into today’s compliance standards, but they’ll also be able to extend the known strike length, and increase the project’s overall tonnage.
QMC is joined by other Canadian lithium plays, each which also add Canada’s case to become a major player in the global lithium supply.
Nemaska Lithium Inc. (OTC: NMKEF) (TSX: NMX) recently released its 2018 Feasibility Study on its Whabouchi facility in Quebec.
As well, Australian lithium giant Galaxy Resources Limited (OTC: GALXF) just significantly expanded its resource estimate for its lithium project in the James Bay region of Quebec.
Because Nemaska and Galaxy are further along in their project development, that leaves QMC in the potentially more lucrative early stage of development, as its samples and drilling programs kick off, leaving more potential blue sky for investors.
QMC’s Canadian operations represent one of multiple options for the global lithium market to look at, should Indian firms seek new lithium-friendly investments in a country like Canada that already has a friendly trade record with them.
COMPARABLES
FMC Lithium (NYSE: FMC)
FMC Lithium is a subsidiary of the FMC Corporation, which is a diversified chemical company, that provides solutions, applications, and products for the global agricultural, consumer, and industrial markets. FMC Lithium offers lithium for use in batteries, polymers, pharmaceuticals, greases and lubricants, glass and ceramics, and other industrial uses. FMC Corporation was founded in 1884 and is headquartered in Philadelphia, Pennsylvania.
Galaxy Resources Limited (OTC: GALXF)
Galaxy Resources is a lithium-focused resource company that explores and produces lithium carbonate mineral properties. The company holds interests in the Sal de Vida brine project in Argentina; the Mt Cattlin spodumene mine in Western Australia; and the James Bay spodumene project in Quebec, Canada. Galaxy Resources Limited is based in Applecross, Australia.
Nemaska Lithium Inc. (OTC: NMKEF) (TSX: NMX)
Nemaska Lithium engages in the exploration and evaluation of hard rock lithium mining properties and related processing of spodumene into lithium compounds in Canada— including the Whabouchi and Sirmac Properties, located in Quebec. Nemaska also has the rights to patent applications and patent cooperation treaty concerning the production of lithium sulfate into lithium hydroxide, as well as lithium hydroxide into lithium carbonate. Nemaska Lithium Inc. was incorporated in 2007 and is headquartered in Quebec City, Canada.
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